The goal of this proposal is to test a novel system designed to elucidate the molecules support the emergence of the early liver bud from the definitive or embryonic endoderm (DE). We propose to gain such insights by using the yolk sac, which is not only functionally and structurally similar to the DE but also shares nearly identical transcriptional profile to the DE and almost all early liver bud markers are expressed in the yolk sac. Although a number of essential liver bud factors have been identified a gap in the field is an understanding of how loss of any one of these factors alters the complete transcriptional profile underlying liver budding. One issue that initially stymied the identification of gene function in liver budding is the requirement of many liver bud essential genes earlier in the visceral endoderm (VE) of the yolk sac. The yolk sac is the extraembryonic tissue that acts as a primitive gut; facilitating nutrient uptake, metabolic waste and gas exchange. Many early liver markers are expressed in the yolk sac and the conservation of genetic networks supports a hypothesis that during the evolution of mammals, the yolk sac co-opted the existing DE genetic program. Although inducible Cre strategies can now bypass genetic requirements in the VE, the difficulty in dissecting/isolating sufficient quantities of early liver bud tissues has prevented in depth genome-wide analyses on both normal and mutant tissue. To overcome these difficulties, we propose to use the yolk sac as a proxy for the early liver bud and to perform transcriptome analysis of mutant and WT yolk sacs to generate candidate factors similarly at play in the liver bud. This strategy will be tested on mutants lacking the transcription factor, Yin-yang 1 (YY1). Loss of YY1 function in either the VE or DE is lethal, resulting in reduced HNF4? and loss of VEGF in both the liver bud and VE as well as loss of VEGF induced angiogenesis in the mesenchyme adjacent to the YY1-/- cells in both tissues. Transcriptional profiling of WT and YY1-/- VE and associated yolk sac mesenchyme will be used to identify candidate VEGF-dependant paracrine signaling molecules that support normal liver bud development and to identify candidate cell-autonomous that regulate VEGF in the liver bud. These methods will be used to build a deeper understanding of the molecular requirements underlying liver bud development and to establish the yolk sac as a genetic paradigm for early liver bud development. Such advances will not only aid in better understanding normal liver development and pathobiology underlying liver disease, but will also aid in producing strategies that generate functional hepatocytes from iPS or ES cells.